The Pawn Protocol facilitates trustless borrowing, lending, and escrow of NFT assets on EVM blockchains. This repository contains the core contracts that power the protocol, written in Solidity.
- 🌐 Website - Our app website, with a high-level overview of the project.
- 📝 Usage Documentation - Our user-facing documentation for Arcade and the Pawn Protocol.
- 💬 Discord - Join the Arcade community! Great for further technical discussion and real-time support.
- 🔔 Twitter - Follow us on Twitter for alerts and announcements.
If you are interested in being whitelisted for the Pawn private beta, contact us on Discord. Public launch coming soon!
This repo uses a fork of Paul Berg's excellent Solidity template. General usage instructions for the repo can be found there. We use a very normal TypeScript/Yarn/Hardhat toolchain.
In order to deploy the contracts to a local hardhat instance run the deploy script.
yarn hardhat run scripts/deploy.ts
The same can be done for non-local instances like Ropsten or Mainnet, but a private key for the address to deploy from must be supplied in hardhat.config.ts as specified in the Hardhat documentation.
In one window, start a node. Wait for it to load. This is a local Ethereum node forked from the current mainnet Ethereum state.
npx hardhat node
In another window run the bootrap script with or without loans created.
yarn bootstrap-with-loans
or
yarn bootstrap-no-loans
Both will deploy our smart contracts, create a collection of ERC20 and ERC721/ERC1155 NFTs, and distribute them amongst the first 5 signers, skipping the first one since it deploys the smart contract. The second target will also wrap assets, and create loans.
The Version 1 of the Pawn protocol uses the contracts described below for its operation. These contracts are currently deployed on the Ethereum mainnet and the Rinkeby testnet. The addresses of our deployed can be found in our documentation. All contracts are verified on Etherscan. Audit reports are also available.
This contract holds ERC20, ERC721, and ERC1155 assets on behalf of another address. The Pawn protocol interacts with asset wrapped bundles, but bundles have no coupling to the Pawn protocol and can be used for other uses. Any collateral used in the Pawn protocol takes the form of an AssetWrapper bundle.
AssetWrapper API Specification
The BorrowerNote is an ERC721 asset that represents the borrower's obligation for a specific loan in the Pawn protocol. The asset can be transferred like a normal ERC721 NFT, which transfers the borrowing obligation to the recipient of the transfer. Holding the BorrowerNote attached to a specific loan gives the holder the right to reclaim the collateral bundle when the loan is repaid.
BorrowerNote and LenderNote are both instantiations of PromissoryNote, a generalized NFT contract that implements ERC721Burnable.
PromissoryNote API Specification
The LenderNote is an ERC721 asset that represents the lender's rights for a specific loan in the Pawn protocol. The asset can be transferred like a normal ERC721 NFT, which transfers the rights of the lender to the recipient of the transfer. Holding the LenderNote attached to a specific loan gives the holder the right to any funds from loan repayments, and the right to claim a collateral bundle for a defaulted loan.
BorrowerNote and LenderNote are both instantiations of PromissoryNote, a generalized NFT contract that implements ERC721Burnable.
PromissoryNote API Specification
The core invariants of the Pawn protocol are maintained here. LoanCore tracks all active loans, the associated AssetWrapper collateral, and PromissoryNote obligations. Any execution logic arond loan origination, repayment, or default is contained within LoanCore. When a loan is in progress, collateral is held by LoanCore, and LoanCore contains relevant information about loan terms and due dates.
This contract also contains admin functionality where operators of the protocol can withdraw any accrued revenue from assessed protocol fees.
This is an external-facing periphery contract that manages loan origination interactions with LoanCore. The OriginationController takes responsibility for transferring collateral assets from the borrower to LoanCore. This controller also checks the validity of origination signatures against the specified parties and loan terms.
OriginationController API Specification
This is an external-facing periphery contract that manages interactions with LoanCore that end the loan lifecycle. The RepaymentController takes responsibility for transferring repaid principal + interest from the borrower to LoanCore for disbursal to the lender, and returning collateral assets from LoanCore back to the borrower on a successful repayment. This controller also handles lender claims in case of default, and ensures ownership of the lender note before allowing a claim.
RepaymentController API Specification
CryptoPunks serve as valuable collateral within the NFT ecosystem, but they do not conform to the ERC721 standard. The PunkRouter uilizes the Wrapped Punks contract to enable users to deposit CryptoPunks into AssetWrapper collateral bundles. This allows wrapping and depositing to a bundle to be an atomic operation.
This contract allows borrowers with a currently-active loan to roll over their collateral to a new loan, without needing to pay back the entire principal + interest. The contract uses an AAVE Flash Loan to borrow enough tokens to repay the loan with interest. Once the original loan is repaid, a new loan is issued with the lender's signature, with the principal of the new loan repaying the flash loan plus the flash loan fee (0.09%). This allows borrowers to extend their loan term without having to move any deployed capital from loan proceeds. Note: if the principal of the new loan less fees is smaller than the old loan's principal + interest + flash loan fee, the contract will attempt to withdraw the balance from the borrower's wallet. If the new loan's principal is larger than the old loan's principal + interest + flash loan fee, the leftover loan proceeds will be sent to the borrower, making this like a refinance.
FlashRollover API Specification
Version 2 of the Pawn protocol is currently in development. More details will be added to this section as the protocol progresses towards release.